Austerity for Dummies

Posted by Tina

The word “austerity” is is used by our socialist friends to disparage sound economic policy. They scornfully spit out the term so as to make the word sound evil: denying children food and shelter and throwing grandma off a cliff. So let’s take a look at what austerity economics looks like in terms any dummy should be able to get:

1. Austerity is not running up a your credit card to a five thousand dollar balance when you only make the minimum wage.

2. Austerity is making sure your kids are well fed, clothed, and cared for medically BEFORE you spend on junk food cigarettes, booze, drugs, eating out or any other extravagance.

3. Austerity is finding ways to save, even if it’s only pennies at a time.

4. Austerity is paying bills on time.

5. Austerity is looking for ways to improve your economic situation.

Definition of austerity from Investopedia;

Austerity is a state of reduced spending and increased frugality in the financial sector. Austerity measures generally refer to the measures taken by governments to reduce expenditures in an attempt to shrink their growing budget deficits.

So Austerity is about living ones life responsibly and in terms of our government it means being wise managers, responsible managers, of the peoples tax money. Does anyone recall the way the left railed against Bush deficit spending. President Obama called it “irresponsible” and “unpatriotric.”

Tell me, how is austerity a bad thing? Why shouldn’t austerity be a high priority of government? And in terms of the overall economy, why shouldn’t what the people need be a high priority as well.

In the last ten years the Democrat Party has had their way. President Obama was ushered in with enormous support by the people. Despite the fact that his policies were not resulting in a growing economy and plenty of jobs, the people elected him again delivering a mandate. After nearly four more years it should be obvious, austerity has been thrown out the window, job creators have been oppressed, and the people are suffering. The president and the left media are still trying to convince the American people that the success of Reagonomics is a myth. What a pathetic political line of BS that is. Obama has never seen growth of 3% during his entire term of office. One of the Reagan years saw growth over 7% and the remaining years averaged around 3%. New businesses sprung up, good jobs were created, and a robust economy continues well beyond his presidency. Bill Clinton benefited from the momentum of the robust Reagan recovery when he made the wise decision to declare the era of big government over and cooperated with the republicans in Congress to enact Reaganesque policy and tax rates.

America needs strong growth. It will not happen in a Bernie or Hillary presidency. Both abhor responsible government, preferring to tax, spend, and grow the cost of government. Just as the last eight years have shown, this would result in more misery for the American people.

Austerity works to make families stronger. It works to make our government stronger and our people more productive, happy, and able to grow the family budget. Austerity is the responsible path to prosperity.

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20 Responses to Austerity for Dummies

  1. Chris says:

    It’s weird to bring up Reagan whilst extolling the virtues of austerity, since Reagan certainly didn’t practice it. He was a huge spender, and the national debt tripled under his presidency. He also oversaw the largest federal government workforce ever. Both conservatives and liberals are misinformed on Reagan’s actual policies.

    • Tina says:

      It’s only weird if you don’t know the history, which branch has the power of the purse, the corrupt practices of Tip O’Neill, and Reagan the man.

      Reagan made a gentleman’s agreement with Speaker O’Neill. He would agree to a tax increase of a dollar for every three dollars delivered in spending cuts. O’Neill agreed, TEFRA was passed, and the tax hikes were implemented. But O’Neill never delivered on his promise of spending cuts. Reagan said later it was the worst mistake of his presidency. Reagan had no allies in the press, in fact, it was just the opposite. O’Neill knew the press had his back.

      So you can accuse Reagan of being naive to have taken O’Niell at his word but you can’t paint him as a big spender.

      I prefer to think of O’Neill as a slimy weasel who played politics for power without regard for deficit spending, the growing debt, or the people who work to pay big government bills.

      Personally, Reagan lived his life by his code. He wouldn’t allow the feed for his horses to be paid by taxpayers, for instance. And like the Bush’s, he and Nancy arranged travel to minimize government expense.

      Some of the increase in employment under Reagan came from beefing up a military decimated by Carter. Tens of thousands of troops added quite a bit to the number of government employed. He also beefed up the intelligence community.

      A Washington Post article addresses this issue but their analysis seems flawed to me. They report Reagan enacted a hiring freeze as one of his first official acts. He noted exceptions to the freeze would be limited to “rare and unusual” cases. Later in the article the WP quoted someone from Partnership for Public Service, “… the ‘rare exemption’ to the hiring freeze became not so rare as the president’s new appointees discovered that many of the federal positions that were being vacated in their agencies were actually mission-critical and needed to be filled.” But Reagan didn’t call for “vacating” personnel; he called for a hiring freeze. So this explanation makes no sense to me. Then later in the same article: “For Palguta, who had been working on federal employee issues for 12 years with the Merit Systems Protection Board before Reagan took office, the increase does not suggest the president betrayed his principles. Instead, when it became clear what was needed to fulfill his inaugural call for “a strong and prosperous America,” he was practical and increased federal staffing.”

      The number of federal employees has dropped under Obama. How much of that is due to cutting back on military operations, the numbers of career military leaving early in disgust, and low recruitment numbers? How much can be attributed to the sequester (Originally Obama’s idea)? It’s difficult to tell exactly what has happened. One thing is for sure, except for the changes in military and how Obama conducted the war, which was winding down when Bush left office, Obama’s policies have been about increasing the bureaucracy. Obamacare represents an expansion in government, for instance.

      What we do know for sure is that once a big bureaucracy has been built government always seems to get bigger and bigger. We also know that ideologically, Democrats are in favor of big government and more government programs and control. Ideologically, Republicans are in favor of limited government and sound fiscal practices. Between actions taken under the left’s control of Congress over the last century and the failure of Republicans to message, educate, and negotiate we find ourselves in a big expensive mess.

      Unfortunately your generation will pay the price and for that I am truly sorry.

      • Harold says:

        Another example of selective liberal memory.

        • Chris says:

          No, it’s another example of Tina moving the goalposts. The original claim was that Reagan practiced austerity and cut spending. Now, it’s that Reagan really really wanted to do this, but was stopped from doing so by Democrats. Which, even if true, totally contradicts the central thesis–that the Reagan years were great for the economy because spending was cut.

          So I’d really like to know, Tina: Since spending was NOT cut during the Reagan years (regardless of who is to blame for that), why are you using the Reagan years as evidence that we should cut spending?

  2. Tina says:

    “The original claim was that Reagan practiced austerity and cut spending. ”

    Actually the “original claim” was simply a criticism of Obamanomics and the erroneous claim that Reaganomics is a myth. I wrote: “After nearly four more years it should be obvious, austerity has been thrown out the window (true, except for the military), job creators have been oppressed (true), and the people are suffering (true). The president and the left media are still trying to convince the American people that the success of Reagonomics is a myth.”

    I said nothing about Reagan “practicing austerity,” although there is no denying he was in favor of downsizing the bureaucracy. (Reagonomics was built on a foundation of tax cuts…allowing the American people to keep more of what they earn.)

    As you know Presidents do not have authority over spending, other than vetoing spending bills. When Congress sends any president a big fat spending bill just days before the government will be shut down it can be a difficult problem. As the not too distant flap over Cruz attempting to “shut down the government” illustrates, people go nuts.

    I will thank you for alerting me to a flaw in my article, which was originally about clarifying the term “austerity.” I swerved into comparisons about the economic policies of Obama and Reagan when I tacked on the nutty recent Obama assertion that the success of Reaganomics is a myth, a mistake.

    My thesis remains intact, austerity should be practiced by government at all times. The need for our leaders to responsibly manage the people’s money cannot be emphasized too greatly. The fact that they don’t is evident in a debt level that has doubled under Obama, is in excess of our GDP, and will become a nightmare of interest expense when rates rise.

    It’s equally important to expose the lie that the practice of “austerity” results in starving children or throwing granny off the cliff. Progressives love to put forth that emotionally loaded bologna but it’s meaningless political regurgitation.

    And finally, the people should understand fully that a combination of austerity (responsible spending) and tax cuts would rein in the bloat, waste, fraud and abuse in government and see Americans active in the workforce and producing again.

    The writing is on the wall. I don’t see why anyone would object…or argue, quite frankly.

    Chris are you against austerity and in favor of spending at today’s levels even if it means people can’t find good jobs?

    • Chris says:

      Spending at today’s level *doesnt* mean people can’t find good jobs. In fact, most economists think that a larger stimulus than what we got in 2008 would have helped job creation happen faster.

      The countries that embraced austerity recovered more slowly from the recession than countries that didn’t.

      Austerity was not practiced during the Reagan years, and Reagan actually presided over one of the largest tax increases in history.

      I don’t blame Reagan for the decline of the middle class, falling wages, and disastrous tax cuts on the rich. I blame his cult-like followers who insist on following an impossible ideal of what Reagan was rather than what he actually did.

      • Tina says:

        I guess that means Chris in favor of irresponsible spending, big government bureaucracy, waste, fraud, and abuse as long as redistribution happens!

        Put another way, his political goal is to have government make sure everybody has the same stuff and nobody is measurably wealthier than anybody else!

        Put another way, his aim is to kill the American dream and support the socialist policies that radicals in the Democrat Party favor for America.

        Put another way his energies go into discrediting what has worked to make America stronger in favor of third world policies that make and keep everyone poor (Except the rich).

        Still another way of putting it is Chris is right and I better get my mind right.

        Well to heck with that! Please stick with me:

        The record on Reagan and taxes from the Daily Caller:

        Ronald Reagan may have presided over the most significant tax reform effort in our nation’s history, yet historical revisionists are attempting to besmirch that legacy — while using him as a straw man against modern Republicans. …

        … Over the course of his two terms in office, Reagan presided over several changes to the tax code. What is important to remember — what is vital to understand — is that not all taxes are created equal. (Some stimulate growth, others blunt it)

        Facts matter. Reagan’s legacy has been co-opted and mangled by both sides. Yes, he raised taxes. Yes he cut taxes. The real story is how he raised taxes and how he cut them. And the overarching theme is that Reagan dramatically lowered tax rates and broadened the base. He was a reformer willing to make tough decisions. And at the end of the day, his legacy is that of a free market tax cutter. “If you aggregate together all the tax hikes … Reagan was a net tax cutter,” says Americans for Tax Reform’s Ryan Ellis. “I believe that makes him unique in the 20th century Cold War era. (emphasis mine)

        Regarding irresponsible spending during the Reagan years, imagine how much lower our debt might be today if lawmakers under Tip O’Neill had allocated funds more responsibly. Consider: Reagan ‘s tax policy generated a huge spike in revenue for the greedy Democrats to spend and still they would not cut spending…not even on spending increases. That’s right, when politicians talk about “cuts” they are usually talking about cutting new budgets,, which are always bigger than the previous year! So cuts aren’t cuts to budgets at all, they represent smaller increases to budgets in the coming year.

        How tax reformers increase revenues is illustrated by Forbes:

        “How do changes in income tax rates affect federal receipts?” Clearly there are deductions and credits which also influence the result. But in the final analysis, the percentage that taxpayers pay is the key statistic.

        The following graph clearly reveals the answer. The red line represents the top marginal tax bracket while the blue line shows the total amount of Federal government revenue each year. There are two salient points here. First, as the graph illustrates, as tax rates declined, government revenue increased. Second, there is a strong negative correlation between the two. To review, correlation measures the relationship between two sets of data. The scale ranges from negative one to positive one. A correlation of positive one indicates that the two data sets move in concert with each other. A correlation of negative one indicates that as one set of data moves up, or down, the other moves in the opposite direction. Using the data from 1913 through the end of 2011, the correlation between the maximum marginal income tax bracket and total Federal receipts is a negative 0.50. In simple terms, when taxes are cut, Federal revenue has a very strong tendency to rise! And when taxes are raised, government revenue has a strong tendency to fall. …In conclusion, as JFK, Reagan, and George W. Bush understood, reducing taxes has a stimulative effect on economic activity which leads to an increase in government receipts.

        (See larger version of graph here)

        And what about government spending? The Tax Foundation informs:

        The federal government expanded dramatically in the 20th century and has continued growing in the 21st. Between 1900 and 2012, federal government receipts increased from 3.0 percent of the economy’s output to 16.5 percent, and federal expenditures rose from 2.7 percent of economic output to 24.0 percent. …

        …Government receipts and expenditures are expressed here as shares of economic output, because the size of the economy is an important determinant of the demand for government services and the ability to support those services. For example, taxes of $100 billion would be a crushing load in a $150 billion economy but much less of a problem in a $600 billion economy.

        However, it should be noted up front that the size of government is only one of many factors that impact the burdens and benefits of government revenue and spending programs. For example, for a given amount of government revenue, the public will be better off if the government relies on taxes that are simple rather than complex (to lessen taxpayers’ paperwork burdens), visible rather than hidden (to let citizens/voters accurately gauge the costs of government services), honestly administered (to uphold fairness and minimize corruption), neutral between consumption and saving (for fairness and to promote growth), and structured to keep marginal tax rates low (to reduce economic distortions that slow growth). Similarly, on the outlay side, the amount of government spending matters greatly but does not reveal, among other things, whether projects are managed efficiently or wastefully, whether programs generate benefits that exceed their direct and indirect costs, whether the government has prioritized high-value projects ahead of low-value ones, and whether spending programs meet broad public needs or direct subsidies to political allies.

        The numbers here also do not include most of the costs and benefits of government rules and regulations. Although there is much uncertainty about their dollar amounts, the costs are certainly large and rising. For example, one study estimated the regulatory costs imposed by the federal government were $1.8 trillion in 2013,[9] which would be well over half the size of, and in addition to, the federal taxes and other receipts reported in the NIPA data. For an indication of the growth of government rules and regulations, consider that the federal tax code has mushroomed from 400 pages in 1913 to 73,954 in early 2013

        Democrats hate the idea of austerity, which simply means responsibly managing the peoples money. They FAVOR policies that take as much money from the private sector as possible.

        The effect of Obama’s policy of stimulus on the middle class couldn’t be more obvious…it has been decimated!

        “Stimulus” is another weasel word used by Democrats to fool the people into thinking its a good thing. Stimulus is government”spending” or “investment” as they like to call it. Stimulus is actually government printing money, which lowers the buying power of every American by making our dollars worth less. Stimulus pushes money into the stock market, making the rich richer and blunting real investment and growth which benefits the middle and poor classes. Stimulus is playing with funny money…a smoke and mirrors game that does NOTHING to create real growth and an abundance of good jobs.

        For those interested Reason Magazine has a very good article about how and why the stimulus failed.

        My purpose is NOT to engage in pathetically STUPID arguments about Reagan’s record as a partisan, as many of you know I have also sited the Kennedy and Clinton records to demonstrate how “Reaganomics” works. The term Reaganomics, after all, was coined for the purpose of politically discrediting both the man and those who champion him and his policies. Even after Bill Clinton embraced Reagan tax and spend policy under a Newt Gingrich led House and had what Democrats tout as a spectacular Clinton economy, they still hang on to the old pejorative, “Reaganomics sucks!” That’s phony and deceitful!

        My purpose is to inform and educate people about the positive effects of reasonable tax rates, responsible government, and smart regulation…and to see this nation strong with it’s people working and enjoying the fruits of their labors again!

  3. dewster says:

    Tina seriously you have not a clue

    the clue here was Dummie

    you’re so passionately brainwashed

  4. Tina says:

    And you are so incredibly, Dewey.

  5. Chris says:

    Tina,

    It would take forever to correct all of the economic misinformation you post, so let’s just look at that embarassing Forbes article.

    I was legitimately shocked when I looked at that graph and saw how little correlation there was between the author’s claims about it and what it actually shows. The writer simply can’t read a graph, and was hoping that his target audience couldn’t either. Fortunately for him, he was right about you.

    There is nothing there to substantiate his claim that when the top marginal rates go down, revenue goes up. Instead, the graph actually shows revenue going up almost constantly without much regard to changes in tax rates. For instance, you can see that between 1990 and 1993, when marginal tax rates went up slightly, revenue continued to climb at about the same pace. This is also the only time period on the graph in which tax rates went up, so there is almost nothing to compare the writers’ claims to; the graph doesn’t show us what happens when tax rates go up, except for this small three year period. So since there is almost nothing there to show us what happens when the top tax rate goes up (since it has been falling steadily since 1960), how can the author make thr argument that increased revenue is due to lowering the rate?

    Furthermore, the graph actually shows revenue rising at its fastest pace in years when tax rates are flat, not when they are lowered or raised. The logical conclusion: revenue always rises, but rises most rapidly when tax rates are unchanged. The other logical conclusion: Duh. Everyone knows that revenue rises almost every year. Only a partisan hack would claim that this is caused by lowering the top marginal tax rate, and only someone extremely gullible would believe them.

    I beg you to read the comments on that article. They are filled with people more knowledgable about economics than I pointing out the problems with the article. The graph doesn’t adjust for inflation or GDP, for example. Forbes is, as usual, publishing complete garbage when it comes to economic analysis.

  6. Tina says:

    Chris: “Forbes is, as usual, publishing complete garbage when it comes to economic analysis,” and ”

    Could you possibly be any more “sanctimonious,” ignorant, or rude?

    I repeat: My purpose is NOT to engage in pathetically STUPID arguments about Reagan’s record as a partisan, as many of you know I have also sited the Kennedy and Clinton records to demonstrate how “Reaganomics” works.

    Brian Reidl also “crunched the numbers” in an article at Heritage:

    In 1980, the last year before the tax cuts, tax revenues were $956 billion (in constant 1996 dollars).

    Revenues exceeded that 1980 level in eight of the next 10 years. Annual revenues over the next decade averaged $102 billion above their 1980 level (in constant 1996 dollars).

    Any increase in budget deficits was therefore the result of spending increases rather than tax cut-induced revenue decreases.

    Richard W. Rahn of CATO explains in another way:

    Those of us who argued in the late 1970s and early 1980s for lower tax rates were often characterized as “radical supply-siders” and criticized for claiming that all tax-rate reductions lead to higher tax revenues. This was untrue; none of the principal advocates of Reagan’s 1981 tax cuts made this claim.

    The Reagan tax cuts reduced rates for all income classes, even though it was well understood that cutting the lower rates would result in substantial revenue losses. Low tax rates (below 20%) do not cause much of a disincentive for working, saving or investing, and hence there is little supply-side effect. We did argue, however, that reducing the high marginal rates (up to 70% on high-income earners) would cause little, if any, revenue loss, because of the large, positive supply-side effects. Were we right?

    Since most of the Reagan tax cuts applied to lower- and middle-income earners, there was close to a dollar lost in tax revenue for each “dollar” of tax cut for these groups. Still, CBO figures show that total tax revenue only fell from 19.2% of gross domestic product (GDP) in 1982, before most of Reagan’s tax-rate reductions were put in place, to 18.4% of GDP in 1989, the year he left office. This happened because the U.S. economy grew by more than one-third in real terms (34.3%), much faster than the 24.3% rate expected even by economists within the Reagan administration. Thus, by the time President Reagan left office, the economy was generating more tax revenue at a maximum 28% rate than many on the left forecast it to generate at a maximum 70% rate.

    More from CATO:

    This study assesses the Reagan supply-side policies by comparing the nation’s economic performance in the Reagan years (1981-89) with its performance in the immediately preceding Ford-Carter years (1974-81) and in the Bush-Clinton years that followed (1989-95).

    On 8 of the 10 key economic variables examined, the American economy performed better during the Reagan years than during the pre- and post-Reagan years.

    Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush-Clinton years.
    Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years.
    Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency.

    The only economic variable that was worse in the Reagan period than in both the pre- and post-Reagan years was the savings rate, which fell rapidly in the 1980s. The productivity rate was higher in the pre-Reagan years but much lower in the post-Reagan years. (Savings were invested, hence the productivity!)

    This study also exposes 12 fables of Reaganomics, such as that the rich got richer and the poor got poorer, the Reagan tax cuts caused the deficit to explode, and Bill Clinton’s economic record has been better than Reagan’s.

    Arthur Laffer expounds, with graphs, at Investors:

    During the Reagan years, “federal income taxes” as a percentage of GDP went from 9.1% in 1981 to 8% in 1989. And to James Pethokoukis of the American Enterprise Institute and others, this means the “Reagan tax cuts didn’t pay for themselves.”

    But wait. Income tax revenues from the top 1% of income earners rose like mad as a share of GDP. In 1981, the top 1% of income tax filers paid total income taxes equal to 1.5% of GDP. In 1989, the top 1% paid a full 2% of GDP in income taxes. From 1981 to 1989, the highest marginal income tax rate, which is the rate paid by the highest income earners, fell from 70% to 28%.

    Think about it: The highest income tax rate paid by the top 1% of income earners fell by 60% (from 70% to 28%), yet the top 1% of income earners paid 33% more in income taxes as a share of GDP.

    Ronald D Rotunda of https://verdict.justia.com/2014/06/23/increasing-revenue-lowering-taxes“>Verdict:

    Lawyers and economists know that there are two primary purposes of taxes: one is to raise funds for the government; the other is to discourage activity. If we want less of something, we tax it. For example, if the federal government raised the tax rate on cigarettes or alcohol, it might raise more revenue, but the primary purpose of the tax is to discourage the activity taxed, to change behavior.

    If the purpose of the tax is to raise funds for the government, the tax rate must not be too high, or the government will collect less than if it had set the rate lower. Lower tax rates can produce more revenue than higher tax rates for the same reason that Wal-Mart, with its lower prices, makes more money than Tiffany & Co. For example, when the United States has lowered the capital gains rate, it has collected more in capital gains taxes. When it raises the rate, it collects less in taxes.

    Consider, for example, what happened since 2003, when Congress lowered the tax rate on capital gains and dividends. The Government revenue from tax payments on capital gains increased by 79 percent and its revenue from dividends increased by 35 percent, even though the taxable rate fell from 39.6 percent to 15 percent. The National Bureau of Economic Research reported in a 2004 Working Paper 2004 (No. 10572), “After a continuous decline in dividend payments over more than two decades, total regular dividends have grown by nearly 20 percent since the beginning of 2003—precisely the point at which the lower tax rate was proposed and subsequently applied retroactively.”

    The federal government has now raised the rate on dividends and capital gains to the highest it has been in years. For taxpayers in the 39.6 percent bracket, the tax on qualified dividends (the ones getting the lower rate) will be 23.8 percent (20 percent plus an additional 3.8 percent investment-income surcharge). In a few years, we can examine the statistics and see if this time, it will be any different from how it has been in the past. Will the higher rates increase tax revenues or (as the past indicates) lower revenues and increase incentives to find loopholes?

    President Obama has said that the capital gains rate should be higher to be fairer. Yet, if raising tax rates lowers government revenue, the government will have less to spend to fund a safety net for the poor. If this tax on investments leads to fewer jobs (because if we tax capital gains we get less of it, just like we get less of anything when we tax it), the people paying for this greater fairness will be the unemployed. (continues)

    Discovery.org:

    Many in the Washington establishment were shocked Aug. 17, when the Congressional Budget Office reported a surge of “unanticipated tax receipts” that will sharply push down this year’s deficit. Those who had been proclaiming the Bush tax rate cuts would result in a big reduction in tax revenues tried to hide their disappointment. It was tough being proved wrong again after having said the same thing when Ronald Reagan cut tax rates in the early 1980s.

    We have now had three major experiments with tax rate reduction in the last half-century, and each time both economic growth and tax revenues have surged, despite the fears and cries of the anti-tax-cut crowd. How much more evidence will they need to understand the difference between tax rates and tax revenues? Most everyone, including most members of Congress, can understand that properly structured tax rate reduction, by decreasing the impediments to working, saving and investing, will lead to a higher rate of economic growth. Why then is it so difficult to understand that a bigger economic pie can lead to more tax revenue rather than less?

    Partisan politics is the answer:

    In 1997 Michael D. LaFaive Mackinac Center for Public Policy wrote in response t a question:

    Why does debate over the effects of income tax cuts on revenues and the budget deficit never end? Do we not have ample empirical data that demonstrates that lowered taxes produce “more” revenue, not less, by stimulating economic activity?

    The answer to these questions first requires a little background information.

    In each of the last three cuts in marginal tax rates, revenues received by the U.S. Treasury have increased. Coolidge cut tax rates in the 1920s, Kennedy cut marginal tax rates in the 1960s, and Reagan cut them in the 1980s.

    Under Coolidge, marginal tax rates were cut from the top rate of 73% to 24%. The economy rewarded this policy by expanding 59% from 1921 to 1929. Revenues received by the federal treasury increased from $719 million in 1921 to more than $1.1 billion 1929. That’s a 61% increase (there was zero inflation in this period). Growth averaged more than six percent annually. We are currently growing at 2.5%.

    Under Kennedy, marginal tax rates were cut from a top rate of 91% to 70%. In real dollar terms, the economy grew by 42%, an average of 5 percent a year from 1961 to 1965. Tax revenue to the U.S. Treasury increased by 62%. Adjusted for inflation, they rose by one-third.

    Under Reagan, marginal tax rates were cut from a top of 70% to 28%. Revenues (from all taxes) to the U.S. Treasury nearly doubled. According to the Budget of the U.S. Government, FY 1997, Office of Management and Budget. Revenues increased from roughly $500 billion in 1980 to $1.1 trillion in 1990.

    In each case, the personal income taxes paid by “the rich” increased when their tax rates were cut. The top 10 percent of earners in the Reagan years paid 48% of the income tax burden between 1981 and 1988.

    Regarding your remarks about tax hikes, there is a correlation between the Bush and Clinton tax hikes and a change in the revenue received by the Treasury. Martin Feldstien, professor of economics at Harvard, estimates that the U.S. Treasury would have collected two-thirds more revenue during the first three years of the Clinton presidency had his administration NOT raised taxes. It should be stressed, however, that the economy of the 1990s has grown moderately, in spite of tax increases, not because of them.

    The reason that much of this data is ignored in debates is politics, pure politics. It pays to engage in class warfare if you are a politician because it divides voters against each other. When the perception is that only the “rich” will profit from a tax cut, such policies become difficult to sell because those labeled as “rich” tend to be in the minority.

    In addition, politicians have a stake in keeping the tax code complex because it allows them to extract campaign donations and favors from people and corporations who derive huge benefits from special tax laws and exemptions in return.

    Chris your party has a huge investment in class warfare politics. Reagan increased opportunity for all classes when he made these tax cuts and reforms…and government benefited from the revenues generated. Reagan had to be destroyed. Your sanctimonious friends will do anything, and did, to rewrite the historical record. I didn’t find comments posted on the Forbes article so I’m unable to counter what you’ve written according to them.

    It’s getting late. I’m outa here. Night all Zzzzzzzzzzzzzzzzzzzzz

  7. Chris says:

    Tina: “Could you possibly be any more “sanctimonious,” ignorant, or rude?”

    Describing the Forbes article, which grossly misinterpreted a graph that didn’t even include the right factors anyway, as “garbage” is not sanctimonious, ignorant, or rude. It is *accurate.* I explained exactly why the article was garbage, in a way anyone could understand.

    I’m uninterested in engaging in a conversation about economics with someone who can’t see that. You’re asking me to now look at tons of other links when you haven’t even conceded that the Forbes one made no sense. When you can admit the Forbes article was garbage, then I’ll address the rest.

  8. Tina says:

    Sure Chris, just as soon as you explain to me how raising taxes coupled with massive government spending improves the economy. I’ve asked you to explain the mechanisms that would make the economy grow. If you are right you should be able to explain it and show me the evidence of improved economic conditions. Ive asked many times and you just go away.

    While you’re at it you can apologize for this ridiculously offensive and blatant LIE: “It would take forever to correct all of the economic misinformation you post.”

    What I take away from this entire exchange, whether that one graph shows a correlation or not, is that you aren’t interested in what would make the economy grow. You are only interested in the partisan effort to discredit the right. And since you are typical of the radical left, you make sure to demean me and my sources while you’re at it.

    I’m sincere in wanting this country to see strong economic growth and good jobs. I’ve witnessed economies over decades of left and right policies and my experience, coupled with what economists observe, tells me that what I post is the truth. Reagan’s economic policy worked. The people did better under Reagan AND the government didn’t lose anything. In fact the government could have used the opportunity to cut deficit spending and improve the debt situation and under the Democrat controlled Congress they chose to spend more instead.

    Reagan’s tax cutting policies, coupled with reforms to the tax code, worked because those who make the economy work were unleashed from the restraints placed on investment and creative urge by oppressive tax rates and the heavy cost of unreasonable regulation.

    The thing that makes me sickest of all is that under Reagan the poor were inspired to lift themselves out of poverty, particularly in the black community. The entrepreneurial spirit took hold all over the country and small businesses exploded.

    Don’t bother to engage with me on the other information I posted. You have proven to be uninterested in anything but politics when it comes to discussion of economic policy.

  9. Chris says:

    Tina: “Sure Chris, just as soon as you explain to me how raising taxes coupled with massive government spending improves the economy”

    Unfair. I asked you about a specific piece of data; you are asking me to justify an entire economic theory, and acting as if those two demands are equally valid. You always do this; you speak in generalities, and any time you are challenged on a specific point, you act as if it doesn’t matter. It’s a blatantly dishonest tactic.

  10. Tina says:

    No Chris, I’m not asking you to do a damn thing.

    You may have a point about the graph but so what…you may also be wrong for want of information. I don’t know how the graph was put together, nor do you.

    What you also did was skip over every other point of the main article (mine), the terrible record of Barack Obama, and countless points made in not only these articles but others I have posted through the years. You also ignore what is right under your own nose and that is, the devastating effects of money printing and tax and spend policies of last eight years!

    You my friend are an unworthy opponent, in my opinion, with an agenda that will only help efforts to make America a weak nation with a population of dependent, needy, citizens lacking in basic skills and increasingly turning to addictions and sloth for want o something meaningful to do. A nation of increasing division and unrest. A nation that’s content to barely get by.

    The one thing that’s difficult to abide is a closed , incurious mind.

    I think we’re done. If not you can have the last word.

    • Chris says:

      Tina: “I don’t know how the graph was put together, nor do you.”

      Yes, I do, because I can read a graph, and it doesn’t say what the author at the Forbes link claims it says. You don’t know that, because you don’t know how to read a graph. It also uses revenue growth, which is a constant, rather than revenue as a percentage of GDP. Again, you would understand that if you had a basic grasp of how to look at data and statistics. You don’t have that, so your economic analysis is useless, and amounts to nothing but “This comports with my ideology, so I am going to believe it.”

  11. Tina says:

    Those with open, curious minds will want to read two articles by F. H. Buckley, both posted at The American Conservative.

    Trump vs the New Class

    The Virtue That Has No Name

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